A single financial choice could mean a staggering $200,000 difference for women's retirement savings. But is it a risk worth taking? Just 32 minutes ago, a thought-provoking revelation emerged, shedding light on the gender gap within KiwiSaver, New Zealand's retirement savings scheme. The crux of the issue? Women are urged to embrace riskier investment strategies to bridge the gap with men's savings.
Here's the catch: Westpac, a prominent financial institution, revealed that despite the gender gap narrowing from 17% in 2020 to 14% in 2025, men consistently contribute and save more, even though women typically live longer. This disparity is evident across all age groups above 18, with the most significant gap in the 30-39 age bracket, where men's average balance is $28,992, a stark contrast to women's $21,740.
But why the difference? Westpac's Sarah Hearn, General Manager of Product, Sustainability, and Marketing, attributes this to the gender pay gap and women taking time off work. However, she also highlights a surprising factor: women tend to opt for less risky funds.
And this is where it gets intriguing. Men allocate 37% of their balances to growth and high-growth funds, while women stick to moderate or conservative funds (32%). But here's the potential payoff: higher-risk funds historically yield higher long-term returns. Morningstar data reveals that aggressive funds have averaged a 9.5% annual return over a decade, dwarfing the 4.2% of conservative funds.
Hearn warns that women's defensive strategies early on could result in a substantial loss of tens of thousands of dollars over time. Westpac estimates that the difference in outcomes between conservative and growth funds over 30 years could exceed $225,000 for a median earner with a 6% contribution.
But is this a one-size-fits-all solution? Hearn suggests that women saving for the long term (13 years or more) and comfortable with balance fluctuations should reconsider their fund choices. She encourages women to openly discuss their financial decisions, as men tend to be more vocal about money matters.
Hearn's advice is clear: check your KiwiSaver fund type and ensure it aligns with your risk tolerance and time horizon. She emphasizes that while balances may fluctuate, long-term gains are the goal. With retirement often decades away, she believes it's time to embrace slightly higher risks for potentially greater rewards.
So, should women take the plunge and opt for riskier investments? Share your thoughts in the comments, and let's spark a conversation about this controversial yet crucial financial decision.
